The EURGBP pair, trading at 0.85526, has lost most of the gains made on Monday and is now aiming for multi-month lows at 0.8535.

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• The EUR/GBP erased most of Monday’s gains and eyes multi-month lows at 0.8535.

The pair currently trades last at 0.85526.

The previous day high was 0.8607 while the previous day low was 0.854. The daily 38.2% Fib levels comes at 0.8581, expected to provide resistance. Similarly, the daily 61.8% fib level is at 0.8566, expected to provide resistance.

The EUR/GBP retreated to the 0.8555 area during Tuesday’s session, erasing most of Monday’s gains +.. Moreover, the Sterling traded strong against the USD, JPY ,CHF, AUD and NZD as hot labour-market data from the UK fueled hawkish bets on the Bank of England (BoE) and a rise in British yields.

The UK Office for National Statistics reported a decrease in jobless benefit claims by 9.6K in May, down from the previous figure of 46.7K . The Unemployment Rate slightly dropped to 3.8% instead of the expected 4% in the three months leading up to April. Average earnings, including and excluding bonuses, which serve as a gauge of wage inflation to the BoE, also rose during this period. That being said, British yields increased across the board with the 2-year rate leading the way, seeing a 5% rise to 4.88%, its highest level since 2008.

Ahead of the June 22 meeting, a 25 basis point (bps) hike is already priced in. Likewise, investors are also discounting hikes for the August, September, and November meeting, and hence a policy rate peaking at 5.5%. However, the short-term trajectory of the Sterling will be determined by the updated macro forecast of the BoE, and investors will pay attention to any clues in the monetary report or the Governor Bailey press conference regarding forward guidance.

On the other hand, Euro price dynamics will also be determined by the European Central Bank (ECB) decision on Thursday and the macroeconomic forecast of its members. As for now, investors fully priced in a 25 bps hike announcement.

According to the daily chart, the EUR/GBP maintains a bearish outlook for the short-term. Despite Monday’s impressive gains, indicators still remain deep in negative territory while the pair trades well below the 20-,100- and 200-day Simple Moving Averages (SMAs), near August 2022 lows of 0.8535.

Supports levels to watch: 0.8550, 0.8545, 0.8535
Resistances levels to watch: 0.8600 (psychological mark), 0.8620, 20-day SMA at 0.8636.

Technical Levels: Supports and Resistances

EURGBP currently trading at 0.8556 at the time of writing. Pair opened at 0.8598 and is trading with a change of -0.49 % .

The pair remains strongly bearish on the daily time frame. It trades below the 20 SMA @ 0.8642, 50 SMA 0.8727, 100 SMA @ 0.878 and 200 SMA @ 0.8755.

The previous day high was 0.8607 while the previous day low was 0.854. The daily 38.2% Fib levels comes at 0.8581, expected to provide resistance. Similarly, the daily 61.8% fib level is at 0.8566, expected to provide resistance.

Note the levels of interest below:

• Pivot support is noted at 0.8557, 0.8515, 0.849
• Pivot resistance is noted at 0.8623, 0.8648, 0.869

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